When Preparing a Reconciliation of Net Income to Cash from Operations,an

question 23

Multiple Choice

When preparing a reconciliation of net income to cash from operations,an increase in the ending inventory over the beginning inventory will result in an adjustment to reported net income because

• A) cash is increased because inventory is a current asset.
• B) inventory is an expense deducted in computing net earnings,but is not a use of cash.
• C) the net increase in inventory is part of the difference between cost of goods sold and cash paid to suppliers.
• D) all changes in noncash accounts must be disclosed.

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Definitions:

Unsolicited Proposal

A spontaneous offer or suggestion made to a potential client or partner without their initiation or request.

Problem Exists

A situation indicating that an issue or difficulty is present.

Credibility

The characteristic of being believable or worthy of trust, often assessed through the accuracy, source, and reliability of information.

Unsolicited Proposal

A proposal offered by a party who takes the initiative to offer it for consideration, without being requested to do so.